He can’t appropriate part of your lot for his benefit without your approval.
Also, he would need the Owners Corporations approval for the alteration of his lot (erecting the granny flat). Owners Corporations vary in the level of approval required for erections and alterations and I am not up to speed with NSW, especially not the recent legislation changes, as I am in the ACT. Nonetheless, he simply can’t do it without an approval. Even if your executive committee has authority to approve erections and alterations, it now cannot approve since it would be contrary to the clear direction given by your last AGM decision to reject the decision.
It seems to me there is nothing further to be done. Having had the proposal considered and unanimously rejected at a general meeting makes his position very clear! He has no position.
If, in spite of all that, construction looks like it is about to occur might you go to the Tribunal and/or local council for a order to halt construction. I don’t think he could find a builder who would do the work without seeing that it is approved by the local planning authorities and they should not approve without seeing evidence that the Owners Corporation had approved.
I would relax. He can’t do anything and if he were to try, he could be easily stopped.